In the context of a severe global shortage of memory chips driven by surging AI demand, the world's largest memory chip manufacturer, Samsung Electronics, has adopted an aggressive pricing strategy. On January 25, media reports indicated that Samsung Electronics has raised the supply price of NAND flash memory by more than 100% in the first quarter of this year. This increase far exceeds previous market expectations and highlights the acute supply-demand imbalance in the current semiconductor market. According to informed industry sources cited in the reports, Samsung Electronics finalized supply contract negotiations with its major clients by the end of last year and officially implemented the new pricing system starting in January. This move follows the recent revelation of a nearly 70% price hike for DRAM, signaling another major price adjustment in the memory market.
The report suggests that Samsung Electronics has already begun a new round of negotiations with customers regarding NAND prices for the second quarter. The market widely anticipates that the upward price trend will continue into the second quarter and potentially persist throughout the entire year. This price increase is not a solo act by Samsung Electronics but is evolving into a collective action across the entire industry. As the top two players in the NAND market share ranking, both Samsung Electronics and SK Hynix have adopted similar pricing strategies, demonstrating the strong bargaining power of leading manufacturers in a seller's market.
Previously, Counterpoint Research published a report stating that the memory market has entered a "super bull market" phase, with current conditions even surpassing the historical peak of 2018. Driven by the continuous surge in AI and server capacity demand, supplier bargaining power has reached an all-time high. It is forecast that memory prices will soar by 40%–50% in Q4 2025; rise by another 40%–50% in Q1 2026; and increase by approximately 20% again in Q2 2026. Overseas investment banks, including Nomura, pointed out that even SanDisk, ranked fifth in the market, plans to raise NAND prices by 100% in the new year. An industry insider stated that, mirroring the situation with DRAM, NAND manufacturers are joining the price hike bandwagon, making a comprehensive industry-wide price increase a foregone conclusion.
The current round of memory price increases is not a traditional cyclical rebound but is driven by a structural expansion in demand fueled by the AI computing revolution. On the demand side, compared to traditional servers, AI training and inference servers often require several times more DRAM and NAND. For example, in large model training, High Bandwidth Memory (HBM) and enterprise-grade SSDs have become standard; memory is no longer a "supporting actor" but a core component of the computing system. On the supply side, manufacturers like Samsung, Micron, and SK Hynix are accelerating their shift towards high-end memory products, leading to a structural compression of mid-to-low-end NAND and DRAM production capacity, thereby further amplifying the supply-demand gap.
Regarding inventory, memory manufacturers underwent a prolonged destocking process throughout 2023–2024. Currently, both channel and customer inventories are at historically low levels. Once demand recovers, price elasticity is expected to be significantly amplified. Concurrently, as the Q1 2026 memory contract/spot price increases exceeded expectations, the price hikes are gradually spreading to segments like outsourcing and packaging & testing. TrendForce anticipates a QoQ price increase of 55%-60% for conventional DRAM in Q1 2026, primarily due to major manufacturers shifting large-scale production capacity to server and HBM applications, leading to tight supply in other markets. NAND is expected to see a QoQ increase of 33%-38%, as manufacturers control overall capacity and are similarly affected by the crowding-out effect from servers.
Overseas NAND manufacturer SanDisk previously proposed long-term volume-lock schemes to several clients requiring 100% cash prepayment, potentially involving contracts of up to 3 years. Simultaneously, SanDisk's Q1 2026 contract prices could see near-doubling growth, higher than the market's expectation of 30%-40%. Looking at the memory industry chain, using Taiwan-based companies as an example, with sustained demand growth from major clients like Micron, the proportion of outsourced orders continues to increase. Companies like Powertech Technology (PTI) and ChipMOS have seen their capacity utilization rates rise recently. Coupled with factors like increased costs, there are reports of price hikes being passed on to customers starting in 2026. Information from domestic memory outsourcing, packaging, and testing channels also indicates widespread tight capacity and price increases.
In terms of short-term catalysts, global memory giants are gradually releasing impressive preliminary earnings reports, with attention focused on the intensive financial disclosures in late January and early February. Samsung released its Q4 2025 earnings forecast, expecting revenue of approximately 93 trillion KRW, up 23% YoY and 8% QoQ; and operating profit of about 20 trillion KRW, surging 208% YoY and 64% QoQ. BIWIN Storage released its 2025 annual earnings forecast, with Q4 2025 revenue estimated at 3.4-5.4 billion yuan (midpoint up 165% YoY and 86.8% QoQ); net profit attributable to shareholders of 820-970 million yuan (midpoint up 249.6% QoQ); and non-GAAP net profit of 780-920 million yuan (midpoint up 299.1% QoQ). The upcoming period from late January to early February marks a dense earnings season for global memory giants, with companies like SK Hynix, Samsung, SanDisk, and Western Digital set to disclose their latest results and outlook, suggesting a wave of concentrated positive news is imminent.
China Merchants Securities pointed out that the better-than-expected price increases for memory chips starting in Q1 2026 drove the market rally in the first half of January. The second half of the month will see numerous preliminary earnings reports from domestic memory companies and quarterly reports from overseas memory manufacturers. Furthermore, they observe that price hikes in memory packaging and testing are gradually spreading. Subsequently, it will be important to monitor whether supporting chips closely related to memory will see synchronized price increases. If this occurs, following the initial spread to packaging and testing, the broader memory upcycle could potentially extend to wider areas. For now, the core recommendations remain memory manufacturers, memory module/chip companies, and memory packaging & testing/outsourcing firms. Future opportunities may lie in areas like memory controller chips and interface chips.
Bank of China International believes that AI and data expansion are driving the memory market into a new cycle, with tight supply and demand causing sustained price increases. Demand for new technology iterations like HBM is robust, and opportunities for accelerated development of domestic memory are emerging, leading to an "Outperform" rating for the industry. Considering both the incremental demand from AI and structural supply shocks, the bank sees highly certain opportunities in the memory industry chain, both in the short and medium to long term.
**Related Concept Stocks:** Gigadevice (03986): The company's core products include specialized memory chips (NOR Flash, NAND Flash, niche DRAM), MCUs, analog chips, and sensor chips, widely used in consumer electronics, automotive, industrial, PC & server, IoT, and other fields. With twenty years of experience in specialized memory chips and fourteen years in MCUs, the company has become a leader in relevant niche markets in mainland China. According to Frost & Sullivan data, based on 2024 sales, it ranks second globally and first in mainland China for NOR Flash (18.5% market share), first in mainland China for both SLC NAND Flash and MCUs, second in mainland China for niche DRAM, and second in mainland China for fingerprint sensor chips (approx. 10% market share), with a global customer base.
SMIC (00981): Financial reports show that SMIC's Q3 revenue was $2.382 billion, a 9.7% year-on-year increase; gross margin was 22%, up 1.6 percentage points quarter-on-quarter. Capacity utilization rose to 95.8%, a 3.3 percentage point increase QoQ. Regarding product platforms, the ultra-low power 28nm logic process has entered mass production, providing customers with lower power consumption and higher quality solutions; CIS and ISP process technologies continue to iterate, improving light sensitivity, image quality, and high signal-to-noise ratio, while developing optical process platforms covering more bands; the embedded memory platform is expanding from consumer markets to automotive-grade and industrial MCU fields; specialty memories like Nor and NAND (both non-volatile) offer higher density, smaller size, and lower power consumption with high reliability.
SHANGHAI FUDAN (01385): As a domestic chip design company with a relatively broad product line, its business encompasses four major product categories: security and identification chips, non-volatile memory, smart meter chips, and FPGAs. Through its controlling subsidiary, Hualing Co., Ltd., the company provides chip testing services to customers.
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